March 16 (Reuters) - Greenbrier Cos Inc (GBX.N) is one of the most likely acquistion targets in the railcar equipment sector, an outcome which could lead the sector to rally significantly, said Keybanc Capital Markets, which upgraded the stock to "buy" from "hold."

Shares of Greenbrier soared 32 percent to $3.80 in Monday morning trade on the New York Stock Exchange.

The brokerage said the Greenbrier and American Railcar Industries Inc (ARII.O) were the most likely companies to feature in merger-related activities, leading to some sort of industry consolidation.

As of July 22 last year, American Railcar majority shareholder, Carl Icahn, held 4.91 percent stake in Greenbrier.

"Should this scenario transpire it would likely "fix" many of the specific issues American Railcar and Greenbrier individually face, and would further lead to capacity rationalization and improved railcar pricing," analyst Steve Barger said in a note dated March 15.

In February last year, Icahn and affiliates had proposed a possible merger of Greenbrier with American Railcar, but did not make an offer or suggest when a merger could take place.

However, in a regulatory filing in June 2008, Icahn had said that a business combination between Greenbrier and American Railroad was not possible due to some "unresolved issues" and that he might sell off all or some of his stake in Greenbrier.

The brokerage, which set a price target of $7 on Greenbrier's stock, also said the company has options to avoid covenant violations or bankruptcy. (Reporting by Biswarup Gooptu in Bangalore; Editing by Amitha Rajan)